Paulson Picks Citigroup Stock (NYSE:C)

Brian Hicks

Updated December 3, 2009

It goes without saying that when war is declared, truth is the first casualty.

On Wall Street, that means the free market has taken most of the bullets lately.

After all, in the heat of the financial crisis last year, every basic tenet of the free market was turned on its head.

You see, in the twisted world of "too big to fail," being just sort of inept wasn’t nearly enough to save you from disaster.

However, if you were monumentally stupid, you were immediately rewarded with a seat in the bomb shelter. What’s more, Uncle Ben and his friends were more than happy to see to it that you got better again.

As for the truth, it was quickly tossed aside… all in the name of economic survival.

Of course, one of the major beneficiaries of this twisted logic was Citigroup Inc. (NYSE: C), one of the world’s largest financial institutions.

That’s because instead of going down in flames, Citi was bailed out by U.S. taxpayers to the tune of $45 billion. On top of that, the U.S. government decided to back $306 billion in Citi’s toxic debt run-up by the company during the housing bubble.

Moral hazard or not, that ensured Citi would live to fight another day — proving the rumors of its demise were greatly exaggerated.

John Paulson Puts Citigroup Stock on the Buy List

Now some twelve months later, not only has Citigroup survived the meltdown, but the company has earned the attention of John Paulson, one of the world’s most successful investors.

Best known for making $3.7 billion on the collapse of the subprime mortgage market, Paulson has been buying shares of Citigroup Stock (NYSE: C), accumulating 300,000,000 shares in the process.

That amounted to a $1.45 billion bet by Paulson that Citigroup would eventually recover. As a result, Citigroup’s share price has been rising since the rumors of Paulson’s interest in the troubled company first surfaced this summer.

Take a look:

citigroup stock chart


Even so, his involvement alone hasn’t been enough to convince the majority of investors that Paulson has found his next high-profile winner. In fact, what happened in Dubai last week only added to the list of doubters.

That has left most investors wondering whether or not it’s safe to follow Paulson’s lead and chase Citigroup’s share price higher.

And in this free six-page report, The Wealth Advisory research team has broken down the beleaguered bank, answering the question on every investor’s mind these days…

Is Citigroup (NYSE: C) Stock a Buy, Sell or Hold?

As a Wealth Daily reader, you can get your hands on our new report (for which we normally charge $29), absolutely free. Here’s what you’ll get:

  • The results from The Wealth Advisory‘s proprietary scoring model
  • A buy, sell, or hold recommendation
  • A 12-month Price Target along with a current Stop/Loss
  • A technical and fundamental analysis of the company’s share price
  • And much more…

To download the report, including our Buy, Sell or Hold recommendation for Citigroup (NYSE:C), click here.

By the way, Citigroup isn’t the only thing John Paulson has been buying lately. Aside from shares of the mega-bank, he also has over $30 billion under management in gold-related investments. What’s more — even at over $1,150 an ounce — he is adding to his positions. To learn more about how to ride with him on this golden wave, click here.

I hope you enjoy your free Citigroup investment report… I’ll be publishing more of these in the weeks to come.

Your bargain-hunting analyst,

steve sig

Steve Christ, Investment Director

The Wealth Advisory


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